Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Other current issues

Because of travel restrictions, Marlow LLP plans to observe the year-end inventory count at Kestrel Foods via live video link with a staff member at the warehouse. Which statement is most appropriate under ISA 501 and ISA 500?

Remote observation of inventory counting is allowed, but the auditor must assess whether the evidence is relevant and reliable, considering authenticity, coverage and the ability to test count. Additional procedures may be needed. It is neither prohibited nor automatically better than attendance in person.

  1. ARemote observation is prohibited, so the auditor must issue a disclaimer of opinion
  2. BVideo observation always provides more reliable evidence than attending in person
  3. CThe auditor should evaluate the reliability of the evidence, such as the video's authenticity, coverage and the ability to perform test counts, and consider supplementing it with other proceduresCorrect
  4. DThe auditor need not consider reliability if management supplies the video

Explanation

ISAs do not prohibit remote procedures. The auditor must consider the relevance and reliability of the evidence obtained, including its source and the risk of manipulation or limited coverage, and may need additional procedures such as later attendance or roll-back testing. Treating remote evidence as automatically superior or automatically unacceptable is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Other current issues shows your real accuracy, how long you take and where you lose marks.

Practise Other current issuesFree diagnostic mock

More Other current issues questions